Thursday 21 May 2015

Thursday, May 21, 2015 Posted by Hari No comments Labels:
Posted by Hari on Thursday, May 21, 2015 with No comments | Labels:

Record $5.7bn (£3.6bn) fines for currency market fix: UBS, JPMorgan, Barclays, Citigroup and RBS
US Attorney General Loretta Lynch said that "almost every day" for five years from 2007, currency traders used a private electronic chat room to manipulate exchange rates. Their actions harmed "countless consumers, investors and institutions around the world", she said. "They engaged in a brazen 'heads I win, tails you lose' scheme to rip off their clients," said New York State superintendent of financial services Benjamin Lawsky. The fines break a number of records. The criminal fines of more than $2.5bn are the largest set of anti-trust fines obtained by the Department of Justice. The £284m fine imposed on Barclays by Britain's Financial Conduct Authority was a record by the regulator. Meanwhile, the $925m fine imposed on Citigroup by the Department of Justice was the biggest penalty for breaking the Sherman Act, which covers competition law. The guilty pleas from the banks are seen as highly significant as banks have settled previous investigations without an admission of guilt. But the fines are "much lower than expected," said Chirantan Barua, an analyst at Bernstein Research in London. "No retroactive massive Libor fine for Barclays is a big positive, as is no reopening of the NPA (non-prosecution agreement). "The fine came in £270m better than we expected for RBS, £850m better in the case of Barclays," he said. Both US and UK regulators will continue to investigate other market manipulations that may see further massive fines imposed. BBC NEWS

Schuh workers to share £25m bonus windfall
The company, with a UK head office in Livingston in Scotland, confirmed the payouts after announcing annual profits of more than £11.5m. The bonus was agreed as part of a 2011 deal when Tennessee-based Genesco Inc. bought the company for £125m. The amount each of the company's 3,500 UK workers receives will depend on their length of service and salary. Typically, a full-time sales advisor on an annual salary of £14,000 and with five years' service will get a bonus of £3,000. A full-time store manager with a £34,000 salary and 10 years' service will receive £14,000. Schuh has 111 shops around the UK. Colin Temple, chief executive of schuh, said: "The success of our business is based on the hard work and dedication of our people and there is no better way to thank them than to let them know today that we are sharing £25m throughout the business." BBC NEWS

Energy firm SSE powers to 40% rise in retail profits despite losing 500,000 customers
SSE has reported a 40% increase in annual retail profits despite a drop in power demand and losing half a million customers. SSE became the first of the big six firms to hike its gas and electricity prices at the end of 2013, by 8.2%. At the time, despite falling wholesale oil and gas process, all the big energy firms said they had to keep prices high to counter Labour’s threat to freeze their prices if they won the election. Ann Robinson, director of consumer policy at, said: “With the threat of a Labour price freeze now off the table, the big six have officially run out of excuses for not making proper, double-digit reductions to customers’ bills, following significant reductions in the cost of wholesale energy.” SSE has cut its gas prices by 4.1% from last month and promised to hold them until July 2016, but government figures show the wholesale price of gas has fallen by almost 17% over the past 12 months. GUARDIAN

Why are wages stagnating? BofE boss Carney enters the immigration debate
In an interview on the Radio 4 Today programme, Mark Carney, the governor of the Bank of England, appeared keen to play down the idea that migrants to the UK have depressed productivity – and wages. After the longest decline in living standards in a generation, the Bank’s latest quarterly inflation report conceded that higher than expected migration may have been one factor constraining productivity – and wages – over the past five years. But Carney stressed there were other factors at work, too. One is the growing prevalence of low-skilled jobs in the workforce. Another is the growing number of older workers, and employees’ willing to take on more hours, which seems to have increased the amount of slack (number of people seeking work) in the labour market – and therefore made it easier for firms to keep do business without having to offer higher wages. Carney played down immigration effects, pointing out that net migration has been only 50,000 a year higher than predictions. The Bank’s monetary policy committee (MPC) is also expecting the impact of migration to fade over time. But the MPC is deeply divided about how much slack there is in the labour market – and there’s a strand of thought that says relatively high inward migration may have structurally weakened British workers’ bargaining power. GUARDIAN

Corporate caught dodging tax: Next is hit with £22.4m tax bill
Fashion retailer Next has been caught diverting profits, made in the UK, offshore to avoid paying tax. The court ruled Next used a tax avoidance scheme called a rate-booster. HM Revenue & Customs (HMRC) referred to it as "complex circular movements of money between companies in the same group, so they can claim there has been double taxation". Legal changes in 2005 and 2009 mean rate-booster schemes are no longer possible or attractive, HMRC added. The Next case is the second to reach court, following a 2013 ruling against P&O Ferries, although the firm appealed against the decision and an appeal judgement is outstanding. HMRC said about £130m in tax was at stake across 20 rate-booster cases, which were awaiting the P&O and Next decisions. About 70 rate-boosters have already been conceded by companies that wanted to avoid going to court. This has brought in more than £500m in tax. BBC NEWS

Wonga relaunch targets 'hard-working people' but 1,509% APR to stay
Following a year in which it was embroiled in scandal for sending out fake legal letters to struggling borrowers and cleared the overdue debts or charges for 375,000 people at a cost of £220m, Britain’s biggest payday loans firm is relaunching itself. Wonga said it was trying to “move away from” people with more serious black marks on their credit files, numbering up to 3m people in the UK. It now has its sights on the 13 million people one rung up the income ladder, that it describes as “cash and credit constrained”. The company said it was also attempting to reduce the risk of its adverts “inadvertently attracting the young or vulnerable.” One of chairman Andy Haste’s first announcements on taking up the reins in July 2014 was that the controversial grandparent puppets used in the company’s TV adverts would be dropped. Wonga will also stop running its ads during TV programmes and channels that are popular with young people, such as Channel 4 show The Big Bang Theory, Futurama on Sky, and the MTV and Animal Planet channels. The new TV advert features “real-world hard-working people”, including a dental nurse, art gallery attendant and what appears to be a middle-class mother of young children, plus a school dinner lady, farmer and tipper truck driver. GUARDIAN

Southern Rail fixes least-punctual train route... by altering the timetable and skipping a stop
The rail company operating Britain’s least-punctual train route has come up with a way of improving the service – altering the timetable. Statistics have shown that the Southern train company’s 7.29am service from Brighton never once reached London Victoria on time at 8.35am throughout 2014. Now Southern has said that from Sunday, the 7.29am will be scheduled to get in at Victoria three minutes later – at 8.38am – and it will also no longer stop at Wivelsfield in West Sussex. Passengers were not pleased by the timetable changes. One – called Bruce – tweeted: “Not stopping at stations would be an ingenious device for running a service on time.” One frustrated customer, Kelly Adams, tweeted: “Every single morning Southern Rail makes me want to break down and cry and scream and rage because their service is so appalling.” GUARDIAN

Los Angeles follows Seattle in doubling hourly minimum wage to $15
"Today, Los Angeles becomes the latest and largest city to throw its support behind the legions of workers who ask for nothing less than to be paid a fair and decent wage," said Christine Owens, executive director of the National Employment Law Project, a lobby group for worker rights. The $15 minimum will be in place by July 2020. Seattle and San Francisco have already agreed to increase the minimum wage to $15 by 2017 and 2018 respectively. That compares with a $7.25 federal minimum wage which individual states can opt to beat or reduce. US retail giant Walmart - the nation's largest private employer - announced in February it plans to raise wages for employees at its US stores. By 1 February 2016, all current workers will earn at least $10 per hour, it said. BBC NEWS

Global shift to more insecure jobs since the financial crisis is fuelling inequality, poverty
Only a quarter of the world’s workers are on permanent contracts, reports the International Labour Organization (ILO). It said the remaining three quarters are employed on temporary or short-term contracts, working informally often without any contract, are self-employed or are in unpaid family jobs. A worldwide trend away from secure jobs risked “perpetuating a vicious circle of weak global demand and slow job creation” that has dogged many countries since the crisis, the UN agency said. The report found that although the number of people on wage and salaried work (as opposed to forms of work such as self-employment or without contracts) was growing worldwide, less than half, or 42%, of those were on a permanent contract. But since the crisis, in developing countries wage and salaried work was growing at a slower pace than before the crisis, while in advanced economies such jobs were not growing and were declining in some cases – such as in the UK. GUARDIAN


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